KEPPEL CORPORATION L

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Keppel Corp. Swung to Second-Quarter Loss on Impairments

07/30/2020 | 06:44am

By Ben Otto

Keppel Corp. swung to a loss in the second quarter due primarily to impairments and weaker performance in its offshore-and-marine business.

The Singapore-based conglomerate said Thursday that it posted a loss of 697.6 million Singapore dollars (US$507.8 million) in the quarter versus profit of S$153.4 million a year ago. Excluding impairments, which were made as the oil-and-gas industry faced a collapse in oil prices amid lower global demand, the company said net profit would have been about S$222 million.

Revenue fell about 26% to S$1.33 billion, with lower contributions across business lines due partly to the effects of Covid-19 containment measures.

On a first-half basis, the company posted a loss of S$537.1 million, while revenue fell 4.0% to S$3.18 billion.

"Notwithstanding Covid-19, most of Keppel's businesses have remained resilient, underpinned by the essential services that we provide," said Chief Executive Loh Chin Hua. "However, due to the impact of the pandemic on the global economy and oil prices, we had to take significant impairments" related to the offshore-and-marine business.

The company said "further rightsizing" would be required at Keppel Offshore & Marine and executives at both the unit and Keppel Corp. will take 5%-10% base-salary reductions.

 

Write to Ben Otto at ben.otto@wsj.com

 

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